Final Results

 Alecto Minerals plc / EPIC: ALO / Market: AIM / Sector: General Financial

3 June 2013

Alecto Minerals plc ('Alecto' or the 'Company')

Final Results

Alecto Minerals plc, the AIM listed multi-commodity exploration and development company with projects in Ethiopia and Mauritania, announces its interim results for the year ended 31 December 2012.

Overview:

·; Exploration campaigns successfully completed across portfolio of Ethiopian gold and Mauritanian IOCG assets with future targets delineated

·; Non-binding Heads of Terms agreement signed with Centamin plc in relation to a proposed joint venture between the two companies to evaluate mining opportunities in Ethiopia

·; US$1.8 million initial expenditure commitment to earn in to 51% of Wayu Boda and US$6 million second expenditure commitment to earn up to 70%, subject to completion of a joint venture

·; £250,000 investment from Centamin plc as part of strategic alliance

·; Board strengthened through the appointment of Michael Johnson and Mike Ware as Chairman and part time executive Director respectively

·; Additional funds raised totalling £1.835 million including a cornerstone investor

Chairman's Statement

In my first statement since joining the Alecto Board in April 2013 I welcome the opportunity to report solid progress on all fronts and I am truly excited about the future potential of the Company, its Ethiopian gold properties and Mauritanian iron oxide copper gold ('IOCG') assets.

Activities have primarily focussed on adding value to the portfolio, prioritising future exploration targets and pursuing strategic partnerships to solidify our position and underpin the value of the portfolio. To this end I believe we have made progress on all fronts particularly in Ethiopia where our work and extensive land position has attracted Centamin plc ('Centamin'), the Arabian-Nubian Shield mining company listed in the FTSE 250, to sign a non-binding Heads of Terms agreement to form a strategic alliance in relation to a proposed joint venture between the two companies ('Joint Venture').

The alliance will allow both companies to evaluate, and potentially pursue together, opportunities offered by certain mining projects identified within the Federal Democratic Republic of Ethiopia, which is rapidly emerging as a highly prospective gold destination. It is intended that a formal joint venture agreement will be entered into between Centamin and Alecto in due course. Importantly, the Wayu Boda Gold Project ('Wayu Boda') has already been designated as a Joint Venture Project and if the JV Agreement is signed, Centamin will commit US$1.8m over the initial expenditure commitment and a further US$6m if they elect to implement the second expenditure commitment in order to earn a 51% and 70% interest respectively. This would be transformational for the project and with the possibility that the Aysid-Metekel Gold Project ('Aysid-Metekel') will be designated as well, we look forward to updating shareholders regarding our on-going relationship with Centamin at the appropriate time.

Importantly, as part of the proposed strategic relationship, Centamin has agreed to subscribe for 15,625,000 new ordinary shares in the capital of Alecto, at 1.6 pence per share, being, in aggregate, a total consideration of £250,000.

Ethiopia

Alecto has significant exposure to two highly prospective gold licences in Ethiopia, a country widely recognised as an exciting and underexplored area in terms of its gold and base metal potential. The 945.5 sq km Wayu Boda Project ('Wayu Boda') is located in the highly prospective central-southern Adola greenstone belt in southern Ethiopia, and the 1,953 sq km Aysid-Metekel exploration licence is in north western Ethiopia.

Wayu Boda

Wayu Boda underwent its first systematic exploration campaign during the year, which involved trenching, geophysics, and geological mapping. Artisanal workings are extensive in the northern 15% of the licence area, occurring in three locations over a distance of 2km. Consequently, this area was targeted as a priority for exploration. Notably, with grades of up to 47.4 g/t of gold reported from rock chip sampling, our preliminary campaign was positive in terms of increasing our knowledge of the mineralisation. Artisanal miners target quartz vein swarms and larger individual quartz veins hosted in metavolcanics, and occasionally the host rock itself.

The project is 24km south of the privately owned National Mining Corporations 'Dawa' discovery which has recently undergone a primary economic assessment by independent consultants Venmyn and is reported to contain reserves of over 17Moz of gold (Addis Fortune. 2012).

14 trenches for a total of 928m of excavation were dug and 853 samples taken. Although we gained useful information related to both the structural and intrusive related controls on mineralisation, the trenching was somewhat hindered by more widespread artisanal working than envisaged, which led to trenches encountering in-filled, worked out areas where no samples were taken. Highlights from the campaign include:

- WBCT004: 14m @ 0.4 g/t Au including 3.6m @ 1.5g/t Au

- WBCT001A: 1.3m @ 4.9 g/t Au

- WBNT005: 2m @ 1.1 g/t Au

Although the grade is modest at surface, the high grades recovered from sampling the deeper artisanal working are encouraging, and need to be investigated through drilling. The trenching results indicate some sporadic higher grade assay results within a broad, schistose, shear zone that is heavily impregnated with quartz veins and veinlets. Small dumps of schist and quartz from the active artisanal mining, obtained from variable but deeper depths within the field, are possibly indicative of higher grades below surface.

Additionally, a ground magnetic survey was carried out by independent consultants SRK Exploration Ltd, with data processed by Stewart Geophysical Consultants Pty. Ltd. The magnetics demonstrated a complex structural array in the project area, which appears to be dominated by NW and NE trending structures and a northwards trending structure, which is believed to predate the other structures and relate directly to the mineralisation. The magnetic data has led to a greater understanding of structural complexity in the area and can be used to direct future exploration.

Geological mapping of trenches indicates that the main potential for mineralisation may be proximal to granite/schist contacts.

Outside of the focal area of exploration the broader licence area shows moderate but as yet undefined potential and as the mineralisation remains open in both directions, the Company intends to expand its exploration activities in the future, particularly on prospective structures to the north and south. The source of alluvial gold on the eastern side of a dominant ridge in the area has yet to be identified and is unlikely to be the same as the gold worked in the main artisanal areas.

As a JV designated project, Centamin will commit US$1.8 million to earn a 51% stake and accelerate this project, subject to successful completion of a Joint Venture. A further US$6 million will be committed if they elect to implement the Second Expenditure Commitment in order a 70% interest. These funds are envisaged to be used to fund a preliminary scout drilling campaign which if successful will be followed by further drilling to deliver a maiden resource. Further details of the use of funds will be provided on signing of a Joint Venture Agreement.

Aysid-Metekel

Our Aysid-Metekel gold exploration licence is located in a mineral rich region approximately 50km north and north-east respectively from the highly prospective Towchester and Brantham tenements of AIM quoted Nyota Minerals Limited. It is also approximately 80km from the Fiti skarn gold deposit discovered by MIDROC Gold Mine plc.

During the period, the Company conducted in-house technical work, compiling and analysing both historic and company data. This work has enabled us to delineate five high priority target areas for follow up work during 2013. The historic data includes 1:250,000 scale geological mapping of the entire licence area with the majority covered by 1:100,000 scale mapping, regional aeromagnetics, 848 steam sediment samples and mineral occurrence mapping. With Alecto's data now integrated, we have successfully built a database of over 1,000 stream sediment samples and 576 soil samples. In addition, Aster imagery was acquired for the entire licence and structural interpretation of this and other satellite imagery indicates the presence of prospective NW trending dextral shear zones within the licence, that are associated with coincident gold in streams and gold in soils anomalies.

The Aysid-Metekel project may be designated as a JV Project subject to further due diligence by the JV Committee. If the project is designated, it has been agreed that Centamin will commit US$1.2 million over the Initial Expenditure Commitment and a further US$5 million if they elect to implement the Second Expenditure Commitment.

Mauritania

The Company has a total land position of 1,828 sq km in the mineral rich Mauritanide belt of Mauritania. The 613 sq km Wad Amour licence is currently considered as the most prospective, and during Q4 2012 we were successful in further demonstrating the potential of the Chiron target through our geophysical and geochemical sampling and trenching programmes. Previous Alecto work at the Chiron target identified anomalous copper values over 800m.

Field and Petrographic work by consultant geologist Peter Pollard, an IOCG specialist and author of several academic papers, confirmed the Chiron target as a "…high priority target for IOCG mineralization similar to that at Guelb Moghrein", which is located 315km to the north-west and produces 17,000 tonnes of concentrate per month.

The Company completed 1,193m of trenching, which produced 1,292 samples for geochemical analysis at ALS Ireland. Trenching highlights include: MTR001 - 93.6m @ 0.11% copper including 1m @ 0.7g/t gold, MTR004 - 54m @ 0.15% copper and MTR007 - 5m @ 0.33% copper. These large low grade intersections are very encouraging and may indicate the possibility for a large tonnage project. From the weathering profile in the region it is anticipated that grades may improve significantly with depth.

Dovetailing with this interpretation, geophysics demonstrated that a major conductivity high lies between two main mineralised ridges at the Chiron target, which is interpreted as possibly resulting from sulphide mineralisation at depth. The anomaly coincides with a strong copper in soils anomaly, surface mineralisation and encouraging intersections in trenching. Also coincident is a WNW trending structure visible in both satellite imagery and ground magnetics. This structure is predicted to relate to the two earliest deformational phases (D1/D2) of the Pan African tectono-thermal event, which are considered to be the most prospective structures in the region, and are the same age as the main conduits for mineralisation at Guelb Moghrein.

With the above in mind, we currently plan to undertake an induced polarisation and drilling campaign as part of the Chiron target's development. Many further targets are present within Alecto's licence in Mauritania that require further follow up, particularly further along strike from the mineralised structures at Chiron. There is also tremendous potential in other unexplored parts of the licence area.

Corporate

Most recently, I was appointed to the Board as Chairman, succeeding Malcolm James who has stepped down to pursue other business interests. I am very pleased to have joined the Company at this exciting time and hope that my extensive experience and broad network of contacts in the mining sector will be highly beneficial to the Company in its forthcoming activities.

In September 2012 we were pleased to welcome Mr. Michael Ware to our Board as part-time Executive Director. As a representative of our cornerstone investor, Mr. Fahad Al-Tamimi, his appointment is aimed at further aligning our working interests. Importantly, Michael has over 30 years of experience in developing exploration, development and production resource assets and we look forward to benefitting from his solid experience going forward.

Financials

During the period, the Company successfully raised £1.835 million by way of placing. This included the participation of a new cornerstone investor, Mr. Fahad Al-Tamimi who invested £1,472,500 by way of a placing of 95,000,000 New Ordinary Shares at 1.55p per share. Cornerstone investor Mr. Fahad Al-Tamimi is a highly successful businessman who is the founder and owner of a substantial diversified business group with its head offices in Riyadh, Saudi Arabia. These funds have been used to implement the Company's development programmes in Africa.

The loss before taxation of the Group for the year ended 31 December 2011 amounted to £1,101,495 (31 December 2011: £1,242,121 ).

The Group's cash position at 31 December 2012 was £848,059 (31 December 2011: £715,153)

Outlook

In summary, this period has been characterised by informative and successful exploration campaigns at both our Ethiopian gold and Mauritanian IOCG assets. Looking ahead, having signed a non-binding Heads of Terms with Centamin, we will focus on progressing this relationship over the coming months and subject to effecting a Joint Venture, to developing our Wayu Boda licence and possibly our Aysid-Metekel licence. Additionally we are also evaluating other corporate opportunities to create value for our shareholders which we hope will come to fruition in the near term.

Finally I would like to take this opportunity to thank our Board, advisers and shareholders for their hard work and support and look forward to keeping them abreast of our developments in the future.

Mike Johnson

Chairman

31 May 2013

For further information, please visit www.alectominerals.com or contact:

STATEMENT OF FINANCIAL POSITION

As at 31 December 2012

CONSOLIDATED INCOME STATEMENT

For the year ended 31 December 2012

CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME

For the year ended 31 December 2012

CONSOLIDATED STATEMENT OF CHANGES IN EQUITY

For the year ended 31 December 2012

COMPANY STATEMENT OF CHANGES IN EQUITY

For the year ended 31 December 2012

CASH FLOW STATEMENTS

For the year ended 31 December 2012

Major non-cash transactions

On 6 March 2012 the Company issued 17,751,480 and 11,337,017 ordinary shares of 0.7 pence each fully paid at 1.69 and 1.81 pence per share respectively, as consideration for business acquisitions during the previous period. On the same date the Company issued 1,775,148 and 1,133,701 ordinary shares of 0.7 pence each fully paid at 1.69 and 1.81 pence per share respectively, in settlement of certain introducer fees in relation to the acquisitions.

On 21 May 2012 the Company issued 38,000,000 warrants exercisable for two years from the date of grant at a price of 3.1 pence. On 7 June 2012 the Company issued a further 9,380,645 warrants exercisable for two years from the date of grant at a price of 3.1 pence.

On 16 July 2012 the Company issued 11,725,715 ordinary shares of 0.7 pence each fully paid at 1.75 pence per share as consideration for business acquisitions during the previous year. On the same date the Company issued 1,172,571 ordinary shares of 0.7 pence each fully paid at 1.75 pence per share in settlement of certain introducer fees in relation to the acquisition.

On 8 October 2012 the Company issued 5,922,581 warrants exercisable for two years from the date of grant at a price of 1.55 pence.

At 31 December 2012, £25,085 of exploration and evaluation additions remained outstanding and unpaid.

Notes to the Financial Statements

1. General information

The principal activity of Alecto Minerals Plc ('the Company') and its subsidiaries (together 'the Group') is the exploration and development of precious and base metals. The Company's shares are listed on the Alternative Investment Market of the London Stock Exchange. The Company is incorporated and domiciled in the UK.

The address of its registered office is One America Square, Crosswall, London EC3N 2SG.

2. Summary of Significant Accounting Policies

The principal Accounting Policies applied in the preparation of these Financial Statements are set out below. These Policies have been consistently applied to all the periods presented, unless otherwise stated.

2.1 Basis of Preparation of Financial Statements

The Group Financial Statements have been prepared in accordance International Financial Reporting Standards as adopted by the European Union (IFRSs as adopted by the EU), the Companies Act 2006 that applies to companies reporting under IFRS and IFRIC interpretations. The Group Financial Statements have also been prepared under the historical cost convention, as modified by the revaluation of available-for-sale financial assets.

The Financial Statements are presented in UK Pound Sterling rounded to the nearest pound.

The preparation of financial statements in conformity with IFRSs requires the use of certain critical accounting estimates. It also requires management to exercise its judgement in the process of applying the Group's Accounting Policies. The areas involving a higher degree of judgement or complexity, or areas where assumptions and estimates are significant to the Financial Statements are disclosed in Note 4.

2.2 Basis of Consolidation

The Group Financial Statements consolidate the Financial Statements of Alecto Minerals Plc and the audited management accounts of all of its subsidiary undertakings made up to 31 December 2012.

Subsidiaries are entities over which the Group has control. Control is the power to govern the financial and operating policies of an entity so as to obtain benefits from its activities. The Group obtains and exercises control through voting rights. The existence and effect of potential voting rights that are currently exercisable or convertible are considered when assessing whether the Company controls another entity. Subsidiaries are fully consolidated from the date on which control is transferred to the Group. They are de-consolidated from the date that control ceases.

The Group uses the acquisition method of accounting to account for business combinations. The consideration transferred for the acquisition of a subsidiary is the fair value of the assets transferred, the liabilities incurred and the equity interests issued by the Group. The consideration transferred includes the fair value of any asset or liability resulting from a contingent consideration arrangement. Acquisition-related costs are expensed as incurred unless they result from the issuance of shares, in which case they are offset against the premium on those shares within equity. Identifiable assets acquired and liabilities and contingent liabilities assumed in a business combination are initially measured at their fair values at the acquisition date.

Investments in subsidiaries are accounted for at cost less impairment.

Where necessary, adjustments are made to the financial statements of subsidiaries to bring the accounting policies used into line with those used by other members of the Group. All significant intercompany transactions and balances between Group enterprises are eliminated on consolidation.

2.3 Going Concern

The Group's business activities together with the factors likely to affect its future development, performance and position are set out in the Chairman's Report on pages 3. In addition, Notes 3 to the Financial Statements include the Group's objectives, policies and processes for managing its capital; its financial risk management objectives; details of its financial instruments and its exposure to credit and liquidity risk.

The Financial Statements have been prepared on a going concern basis. Although the Group's assets are not generating revenues and an operating loss has been reported, the Directors believe that the Group has sufficient funds to undertake its committed expenditure over the next 12 months, and are confident that additional funding will be forthcoming to continue its current exploration programme as well as additional works.

The Directors have a reasonable expectation that the Group and Company have adequate resources to continue in operational existence for the foreseeable future. Thus they continue to adopt the going concern basis of accounting in preparing the annual financial statements.

2.4 New and Amended Standards

(a) New and amended standards and interpretations mandatory for the first time for the financial year beginning 1 January 2012 and relevant to the Group.

There are no IFRSs or IFRIC interpretations that are effective for the first time for the financial year beginning on or after 1 January 2012 that would be expected to have a material impact on the Company or Group.

(b) New and amended standards and interpretations mandatory for the first time for the financial year beginning 1 January 2012 but not currently relevant to the Group.

A number of new standards and amendments to standards and interpretations are effective for annual periods beginning on or after 1 January 2012, and have not been applied in preparing these financial statements. None of these is expected to have a significant effect on the financial statements of the Company or Group.

Amendments to IFRS 1, 'First time adoption' on fixed dates and hyperinflation. The first amendment replaces references to a fixed date of 1 January 2004 with ''the date of transition to IFRSs", thus eliminating the need for companies adopting IFRSs for the first time to restate derecognition transactions that occurred before the date of transition to IFRSs. The second amendment provides guidance on how an entity should resume presenting financial statements in accordance with IFRSs after a period when the entity was unable to comply with IFRSs because its functional currency was subject to severe hyperinflation.

IFRS 7, 'Financial instruments: Disclosures' was amended in October 2012 for the transfer of financial assets. These amendments are as part of the IASB's comprehensive review of off Statement of Financial Position activities. The amendments promote transparency in the reporting of transfer transactions and improve users' understanding of the risk exposures relating to transfers of financial assets and the effect of those risks on an entity's financial position, particularly those involving securitisation of financial asset.

Amendments to IAS 12, 'Income Taxes' on deferred tax. Currently IAS 12 requires an entity to measure the deferred tax relating to an asset depending on whether the entity expects to recover the carrying amount of the asset through use or sale. It can be difficult and subjective to assess whether recovery will be through use or through sale when the asset is measured using the fair value model in IAS 40 Investment Property. Hence this amendment introduces an exception to the existing principle for the measurement of deferred tax assets or liabilities arising on investment property measured at fair value. As a result of the amendments, SIC 21, 'income taxes - recovery of revalued non-depreciable assets', would no longer apply to investment properties carried at fair value. The amendments also incorporate into IAS 12 the remaining guidance previously contained in SIC 21, which is accordingly withdrawn.

(c) New standards, amendments and interpretations issued but not effective for the financial year beginning 1 January 2012 and not early adopted.

The standards and interpretations that are issued, but not yet effective, up to the date of issuance of the financial statements are disclosed below. The Company and Group intend to adopt these standards, if applicable, when they become effective. Unless otherwise stated, the Directors are assessing the possible impact of the following on the Financial Statements:

Amendment to IAS 1, 'Financial statement presentation' regarding other comprehensive income. The main change resulting from these amendments is a requirement for entities to group items presented in 'other comprehensive income' (OCI) on the basis of whether they are potentially reclassifiable to profit or loss subsequently (reclassification adjustments). The amendments do not address which items are presented in OCI. The amendment becomes effective for annual periods beginning on or after 1 July 2012.

IAS 19, 'Employee benefits', was amended in June 2011. The amendments eliminate the option to defer the recognition of gains and losses, known as the "corridor method"; streamline the presentation of changes in assets and liabilities arising from defined benefit plans, including requiring re-measurements to be presented in other comprehensive income; and enhance the disclosure requirements for defined benefit plans, providing better information about the characteristics of defined benefit plans and the risks that entities are exposed to through participation in those plans. The amendment becomes effective for annual periods beginning on or after 1 January 2013. The amendment has no impact on the Group.

Amendment to IFRS 1, 'First-time Adoption of International Financial Reporting Standards' on government loans. This amendment addresses how first-time adopters would account for a government loan with a below-market rate of interest when transitioning to IFRS. It also adds an exception to the retrospective application of IFRS, which provides the same relief to first time adopters granted to existing preparers of IFRS Financial Statements when the requirement was incorporated into IAS 20 'Accounting for Government Grants and Disclosure of Government Assistance' in 2008. The amendment is effective for the accounting period beginning on or after 1 January 2013, subject to endorsement by the EU. The amendment has no impact on the Group.

IFRS 7, 'Financial Instruments: Disclosures' was amended for asset and liability offsetting. This amendment requires disclosure of information that will enable users of financial statements to evaluate the effect or potential effect of netting arrangements, including rights of set-off associated with the entity's recognised financial assets and recognised financial liabilities, on the entity's financial position. The amendment is effective for the accounting period beginning on or after 1 January 2013, subject to endorsement by the EU.

IFRS 10, 'Consolidated financial statements', builds on existing principles by identifying the concept of control as the determining factor in whether an entity should be included within the consolidated financial statements of the parent company. The standard provides additional guidance to assist in the determination of control where this is difficult to assess. The Group is yet to assess IFRS 10's full impact and intends to adopt IFRS 10 no later than the accounting period beginning on or after 1 January 2013.

IFRS 11, 'Joint Arrangements' provides for a more realistic reflection of joint arrangements by focusing on the rights and obligations of the arrangement, rather than its legal form. There are two types of joint arrangement; joint operations and joint ventures. Joint operations arise where a joint operator has rights to the assets and obligations relating to the arrangement and therefore accounts for its share of assets, liabilities, revenue and expenses. Joint ventures arise where the joint venture has rights to the net assets of the arrangement and therefore equity accounts for its interest. Proportional consolidation of joint ventures is no longer allowed. The Group is yet to assess IFRS 11's full impact and intends to adopt IFRS 11 no later than the accounting period beginning on or after 1 January 2013.

IFRS 12, 'Disclosures of interests in other entities', includes the disclosure requirements for all forms of interests in entities, including joint arrangements, associates, special purpose vehicles and other off Statement of Financial Position vehicles. The Group is yet to assess IFRS 12's full impact and intends to adopt IFRS 12 no later than the accounting period beginning on or after 1 January 2013.

Amendments to IFRS 10, 'Consolidated Financial Statements', IFRS 11, 'Joint Arrangements and IFRS 12, 'Disclosure of Interests in Other Entities', provide additional transition relief to IFRSs 10,11 and 12 by limiting the requirement to provide adjusted comparative information to only the preceding comparative period. For disclosures related to unconsolidated structured entities, the amendments will remove the requirement to present comparative information for periods before IFRS 12 is first applied. The Group is yet to assess the full impact of these amendments and intends to adopt the amended standards no later than the accounting period beginning on or after 1 January 2013, subject to endorsement by the EU.

IFRS 13, 'Fair value measurement', aims to provide consistency and reduce complexity by providing a precise definition of fair value and a single source of fair value measurement and disclosure requirements for use across IFRSs. The requirements, which are largely aligned between IFRS and US GAAP, do not extend the use of fair value accounting but provide guidance on how it should be applied where its use is already required or permitted by other standards with IFRSs or US GAAP. The standard becomes effective for annual periods beginning on or after 1 January 2013.

IAS 27, 'Separate Financial Statements', replaces the current version of IAS 27, 'Consolidated and Separate Financial Statements' as a result of the issue of IFRS 10. The revised standard includes the requirements relating to separate financial statements. The revised standard becomes effective for annual periods beginning on or after 1 January 2013.

IAS 28, 'Investments in Associates and Joint Ventures', replaces the current version of IAS 28,'Investments in Associates', as a result of the issue of IFRS 11. The revised standard includes the requirements for associates and joint ventures that have to be equity accounted following the issue of IFRS 1. The Group is yet to assess full impact of the revised standard and intends to adopt IAS 28 (revised) no later than the accounting period beginning on or after 1 January 2013.

IFRIC 20, 'Stripping Costs in the Production Phase of a Surface Mine', clarifies when production stripping should lead to the recognition of an asset and how that asset should be measured, both initially and in subsequent periods. The interpretation may require the Group to write off existing stripping assets to opening retained earnings if the assets cannot be attributed to an identifiable component of an ore body. The Group is yet to assess IFRIC 20's full impact and intends to adopt IFRIC 20 no later than the accounting period beginning on or after 1 January 2013.

IFRS 9, 'Financial instruments', addresses the classification, measurement and recognition of financial assets and financial liabilities. IFRS 9 was issued in November 2009 and October 2010. It replaces parts of IAS 39 that relate to the classification and measurement of financial instruments. IFRS 9 requires financial assets to be classified into two measurement categories: those measured as at fair value and those measured at amortised cost. The determination is made at initial recognition. The classification depends on the entity's business model for managing its financial instruments and the contractual cash flow characteristics for the instrument. For financial liabilities, the standard retains most of the IAS 39 requirements. The main change is that, in cases where the fair value option is taken for financial liabilities, the part of a fair value change due to an entity's own credit risk is recorded in other comprehensive income rather than the income statement, unless this creates an accounting mismatch. The Group is yet to assess IFRS 9's full impact and intends to adopt IFRS 9 no later than the accounting period beginning on or after 1 January 2015, subject to endorsement by the EU. The Group will also consider the impact of the remaining phases of IFRS 9 when completed by the Board.

Amendments to IAS 32, 'Financial Instruments: Presentation', add application guidance to address inconsistencies identified in applying some of the criteria when offsetting financial assets and financial liabilities. This includes clarifying the meaning of "currently has a legally enforceable right of set-off" and that some gross settlement systems may be considered equivalent to net settlement. The Group is yet to assess the full impact of the amendments to IAS 32 and intends to adopt the amended standard no later than the accounting period beginning on or after 1 January 2014.

'Annual Improvements 2009 - 2011 Cycle' sets out amendments to various IFRSs as follows:

·; An amendment to IFRS 1, 'First-time Adoption' clarifies whether an entity may apply IFRS 1:

(a) if the entity meets the criteria for applying IFRS 1 and has applied IFRS 1 in a previous reporting period; or

(b) if the entity meets the criteria for applying IFRS 1 and has applied IFRSs in a previous reporting period when IFRS 1 did not exist.

·; The amendment to IFRS 1 also addresses the transitional provisions for borrowing costs relating to qualifying assets for which the commencement date for capitalization was before the date of transition to IFRSs.

·; An amendment to IAS 1, 'Presentation of Financial Statements' clarifies the requirements for providing comparative information:

(a) for the opening Statement of Financial Position when an entity changes accounting policies, or makes retrospective restatements or reclassifications; and

(b) when an entity provides Financial Statements beyond the minimum comparative information requirements.

·; An amendment to IAS 16, 'Property, Plant and Equipment' addresses a perceived inconsistency in the classification requirements for servicing equipment.

·; An amendment to IAS 32, 'Financial Instruments: Presentation' addresses perceived inconsistencies between IAS 12, 'Income Taxes' and IAS 32 with regard to recognizing the consequences of income tax relating to distributions to holders of an equity instrument and to transaction costs of an equity transaction.

·; An amendment to IAS 34, 'Interim Financial Reporting' clarifies the requirements on segment information for total assets and liabilities for each reportable segment.

The Group intends to adopt the amended standards no later than the accounting period beginning on or after 1 January 2013, subject to endorsement by the EU. These improvements are not expected to have an impact on the Group.

Amendments to IFRS 10 "Consolidated Financial Statements", IFRS 12 "Disclosure of Interests in Other Entities" and IAS 27 "Separate Financial Statements" define an investment entity and introduce an exception to consolidating particular subsidiaries for investment entities. These amendments require an investment entity to measure those subsidiaries at fair value through profit or loss in accordance with IFRS 9, 'Financial Instruments', in its consolidated and separate financial statements. The amendments also introduce new disclosure requirements for investment entities in IFRS 12 and IAS 27. This amendment applies to annual periods beginning on or after 1 January 2014].

2.5 Segment Reporting

Operating segments are reported in a manner consistent with the internal reporting provided to the chief operating decision-maker. The chief operating decision-maker, who is responsible for allocating resources and assessing performance of the operating segments, has been identified as the Board of Directors that makes strategic decisions.

2.6 Foreign Currencies

(a) Functional and presentation currency

Items included in the Financial Statements of the Group's entities are measured using the currency of the primary economic environment in which the entity operates (the 'functional currency'). The functional currency of the UK parent entity is Pound Sterling and the functional currency of the BVI subsidiary is US Dollars. The currency of Mauritania is the Mauritanian Ouguiya; however all material contracts with the Mauritanian subsidiary are denominated in Euros which is, therefore, its functional currency. The currency of Ethiopia is the Ethiopian Birr, therefore the functional currency of the Ethiopian subsidiaries. The Financial Statements are presented in Pound Sterling, rounded to the nearest pound, which is the Company's functional and Group's presentation currency.

(b) Transactions and balances

Foreign currency transactions are translated into the functional currency using the exchange rates prevailing at the dates of the transactions or valuation where such items are re-measured. Foreign exchange gains and losses resulting from the settlement of such transactions and from the translation at year-end exchange rates of monetary assets and liabilities denominated in foreign currencies are recognised in the Statement of Comprehensive Income.

(c) Group companies

The results and financial position of all the Group entities (none of which has the currency of a hyperinflationary economy) that have a functional currency different from the presentation currency are translated into the presentation currency as follows:

·; assets and liabilities for each Statement of Financial Position presented are translated at the closing rate at the date of that Statement of Financial Position sheet;

·; income and expenses for each Statement of Comprehensive Income are translated at average exchange rates (unless this average is not a reasonable approximation of the cumulative effect of the rates prevailing on the transaction dates, in which case income and expenses are translated at the dates of the transactions); and

·; all resulting exchange differences are recognised in other comprehensive income.

On consolidation, exchange differences arising from the translation of the net investment in foreign entities, and of monetary items receivable from foreign subsidiaries for which settlement is neither planned nor likely to occur in the foreseeable future are taken to other comprehensive income. When a foreign operation is sold, such exchange differences are recognised in the Statement of Comprehensive Income as part of the gain or loss on sale.

2.7 Intangible assets

(a) Goodwill

Goodwill arises on the acquisition of subsidiaries and represents the excess of the consideration transferred over the Company's interest in the fair value of the net identifiable assets, liabilities and contingent liabilities of the acquiree.

For the purpose of impairment testing, goodwill acquired in a business combination is allocated to each of the cash-generating units, or groups of cash-generating units, that are expected to benefit from the synergies of the combination. Each unit or group of units to which the goodwill is allocated represents the lowest level within the entity at which the goodwill is monitored for internal management purposes. Goodwill is monitored at the operating segment level.

Goodwill impairment reviews are undertaken annually, or more frequently if events or changes in circumstances indicate a potential impairment. The carrying value of goodwill is compared to the recoverable amount, which is the higher of value in use and the fair value less costs to sell. Any impairment is recognised immediately as an expense and is not subsequently reversed.

(b) Exploration and evaluation

The Group recognises expenditure as exploration and evaluation assets when it determines that those assets will be successful in finding specific mineral resources. Expenditure included in the initial measurement of exploration and evaluation assets and which are classified as intangible assets relate to the acquisition of rights to explore, topographical, geological, geochemical and geophysical studies, exploratory drilling, trenching, sampling and activities to evaluate the technical feasibility and commercial viability of extracting a mineral resource. Capitalisation of pre-production expenditure ceases when the mining property is capable of commercial production.

Exploration and evaluation assets are recorded and held at cost.

Exploration and evaluation assets are assessed annually for impairment. The assessment is carried out by allocating exploration and evaluation assets to cash generating units, which are based on specific projects or geographical areas.

Whenever the exploration for and evaluation of mineral resources in cash generating units does not lead to the discovery of commercially viable quantities of mineral resources and the Group has decided to discontinue such activities of that unit, the associated expenditures are written off to the Statement of Comprehensive Income.

2.8 Plant and Equipment

Plant and equipment is stated at cost less accumulated depreciation and any accumulated impairment losses. Depreciation is provided on all tangible assets to write off the cost less estimated residual value of each asset over its expected useful economic life on a straight line basis at the following annual rates:

Field equipment - 20% straight line

Motor vehicles - 20% straight line

Computer equipment - 20-50% straight line

An asset's carrying amount is written down immediately to its recoverable amount if the asset's carrying amount is greater than its estimated recoverable amount.

Gains and losses on disposal are determined by comparing the proceeds with the carrying amount and are recognised within 'Other (losses)/gains' in the Statement of Comprehensive Income.

2.9 Impairment of non-financial assets

Assets that have an indefinite useful life, for example, intangible assets not ready to use, are not subject to amortisation and are tested annually for impairment. Tangible assets are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount may not be recoverable. An impairment loss is recognised for the amount by which the asset's carrying amount exceeds its recoverable amount. The recoverable amount is the higher of an asset's fair value less costs to sell and value in use. For the purposes of assessing impairment, assets are grouped at the lowest levels for which there are separately identifiable cash flows (cash generating units). Non-financial assets that suffered impairment are reviewed for possible reversal of the impairment at each reporting date.

2.10 Financial Assets

Classification

The Group classifies its financial assets in the following categories: loans and receivables and available-for-sale. The classification depends on the purpose for which the financial assets were acquired. Management determines the classification of its financial assets at initial recognition.

(i) Loans and receivables

Loans and receivables are non-derivative financial assets with fixed or determinable payments that are not quoted in an active market. They are included in current assets, except for maturities greater than 12 months after the Statement of Financial Position date. These are classified as non-current assets. The Group's loans and receivables comprise trade and other receivables, restricted assets and cash and cash equivalents in the Statement of Financial Position.

(ii) Available-for-sale financial assets

Available-for-sale financial assets are non-derivatives that are either designated in this category or not classified in any of the other categories. They are included in non-current assets unless the investment matures or management intends to dispose of the investment within 12 months of the end of the reporting period.

Recognition and measurement

Financial assets are initially recognised at fair value plus transaction costs. Financial assets are derecognised when the rights to receive cash flows from the assets have expired or have been transferred, and the Group has transferred substantially all of the risks and rewards of ownership. Available-for-sale financial assets are subsequently carried at fair value unless the Group is precluded from doing so as, in the case of unlisted equity securities, the range of reasonable fair value estimates is significant and the probabilities of the various estimates cannot be reasonably assessed. In such circumstances available-for-sale financial assets are held at cost and reviewed annually for impairment. Loans and receivables are subsequently carried at amortised cost using the effective interest method.

Changes in the fair value of monetary and non-monetary securities classified as available-for-sale are recognised in other comprehensive income. When securities classified as available-for-sale are sold or impaired, the accumulated fair value adjustments recognised in equity are included in the Statement of Comprehensive Income as "gains and losses from investment securities."

Interest on available-for-sale securities calculated using the effective interest method is recognised in the Statement of Comprehensive Income as part of other income. Dividends on available-for-sale equity instruments are recognised in Statement of Comprehensive Income as part of other income when the Group's right to receive payments is established.

Impairment of financial assets

The Group assesses at the end of each reporting period whether there is objective evidence that a financial asset, or a group of financial assets, is impaired. A financial asset, or a group of financial assets, is impaired, and impairment losses are incurred, only if there is objective evidence of impairment as a result of one or more events that occurred after the initial recognition of the asset (a "loss event"), and that loss event (or events) has an impact on the estimated future cash flows of the financial asset, or group of financial assets, that can be reliably estimated.

The criteria that the Group uses to determine that there is objective evidence of an impairment loss include:

·; significant financial difficulty of the issuer or obligor;

·; a breach of contract, such as a default or delinquency in interest or principal repayments;

·; the disappearance of an active market for that financial asset because of financial difficulties;

·; observable data indicating that there is a measurable decrease in the estimated future cash flows from a portfolio of financial assets since the initial recognition of those assets, although the decrease cannot yet be identified with the individual financial assets in the portfolio; or

·; for assets classified as available-for-sale, a significant or prolonged decline in the fair value of the security below its cost.

(i) Assets carried at amortised cost

The amount of impairment is measured as the difference between the asset's carrying amount and the present value of estimated future cash flows (excluding future credit losses that have not been incurred), discounted at the financial asset's original effective interest rate. The asset's carrying amount is reduced, and the loss is recognised in the Statement of Comprehensive Income. As a practical expedient, the Group may measure impairment on the basis of an instrument's fair value using an observable market price.

If, in a subsequent period, the amount of the impairment loss decreases and the decrease can be related objectively to an event occurring after the impairment was recognised (such as an improvement in the debtor's credit rating), the reversal of the previously recognised impairment loss is recognised in the Statement of Comprehensive Income.

(ii) Assets classified as available-for-sale

The cumulative impairment loss - measured as the difference between the acquisition cost and the current fair value, less any impairment loss on that financial asset previously recognised in the Statement of Comprehensive Income - is removed from equity and recognised in the Statement of Comprehensive Income.

2.11 Cash and Cash Equivalents

Cash and cash equivalents comprise cash at bank and in hand, and are subject to an insignificant risk of changes in value.

2.12 Share Capital

Ordinary shares are classified as equity. Incremental costs directly attributable to the issue of new shares or options are shown in equity as a deduction, net of tax, from the proceeds.

2.13 Share Based Payments

The Group operates a number of equity-settled, share-based schemes, under which the entity receives services from employees or third party suppliers as consideration for equity instruments (options and warrants) of the Group. The fair value of the third party suppliers' services received in exchange for the grant of the options is recognised as an expense in the Statement of Comprehensive Income or charged to equity depending on the nature of the service provided. The value of the employee services received is expensed in the Statement of Comprehensive Income and its value is determined by reference to the fair value of the options granted:

·; including any market performance conditions;

·; excluding the impact of any service and non-market performance vesting conditions (for example, profitability or sales growth targets, or remaining an employee of the entity over a specified time period); and

·; including the impact of any non-vesting conditions (for example, the requirement for employees to save).

Non-market vesting conditions are included in assumptions about the number of options that are expected to vest. The total expense or charge is recognised over the vesting period, which is the period over which all of the specified vesting conditions are to be satisfied. At the end of each reporting period, the entity revises its estimates of the number of options that are expected to vest based on the non-market vesting conditions. It recognises the impact of the revision to original estimates, if any, in the Statement of Comprehensive Income or equity as appropriate, with a corresponding adjustment to a separate reserve in equity.

When the options are exercised, the Company issues new shares. The proceeds received, net of any directly attributable transaction costs, are credited to share capital (nominal value) and share premium when the options are exercised.

2.14 Trade Payables

Trade payables are obligations to pay for goods or services that have been acquired in the ordinary course of business from suppliers. Accounts payable are classified as current liabilities if payment is due within one year or less. If not, they are presented as non-current liabilities.

Trade payables are recognised initially at fair value, and subsequently measured at amortised cost using the effective interest method.

2.15 Taxation

The tax credit or expense for the period comprises movement in deferred tax. Tax is recognised in the Statement of Comprehensive Income, except to the extent that it relates to items recognised in other comprehensive income or directly in equity. In this case, the tax is also recognised in other comprehensive income or directly in equity, respectively.

Deferred tax is accounted for using the balance sheet liability method in respect of temporary differences arising from differences between the carrying amount of assets and liabilities in the financial statements and the corresponding tax bases used in the computation of taxable profit. However, deferred tax liabilities are not recognised if they arise from the initial recognition of goodwill; deferred tax is not accounted for if it arises from initial recognition of an asset or liability in a transaction other than a business combination that at the time of the transaction affects neither accounting nor taxable profit or loss.

In principle, deferred tax liabilities are recognised for all taxable temporary differences and deferred tax assets are recognised to the extent that it is probable that taxable profits will be available against which deductible temporary differences can be utilised.

Deferred tax liabilities are recognised for taxable temporary differences arising on investments in subsidiaries and associates, and interests in joint ventures, except where the Company is able to control the reversal of the temporary difference and it is probable that the temporary difference will not reverse in the foreseeable future.

Deferred tax assets and liabilities are offset when there is a legally enforceable right to offset current tax assets against current tax liabilities and when the deferred tax assets and liabilities relate to taxes levied by the same taxation authority on either the same taxable entity or different taxable entities where there is an intention to settle the balances on a net basis.

Deferred tax is calculated at the tax rates that are expected to apply to the period when the asset is realised or the liability is settled. Deferred tax assets and liabilities are not discounted.

2.16 Operating leases

Leases of assets under which a significant amount of the risks and benefits of ownership are effectively retained by the lessor are classified as operating leases. Operating lease payments are charged to the income statement on a straight-line basis over the period of the respective leases.

2.17 Finance income

Interest income is recognised on a time proportion basis, taking into account the principal amounts outstanding and the interest rates applicable.

3. Financial Risk Management

3.1 Financial Risk Factors

The Group's activities expose it to a variety of financial risks: market risk (including foreign currency risk and price risk), credit risk and liquidity risk. The Group's overall risk management programme focuses on the unpredictability of financial markets and seeks to minimise potential adverse effects on the Group's financial performance.

Market Risk

(a) Foreign currency risk

The Group operates internationally and is exposed to foreign exchange risk arising from various currency exposures, primarily with respect to the Euro, Ethiopian Birr, Mauritanian Ouguiya and the British Pound. Foreign exchange risk arises from future commercial transactions, recognised assets and liabilities and net investments in foreign operations. The Group negotiates all material contracts for activities in relation to its subsidiaries in either British Pounds or Euros which in the Directors' opinion are more stable than the respective local currencies. The Group also holds minimal liquid assets in Mauritanian Ouguiya and Ethiopian Birr. The Group does not hedge against the risks of fluctuations in exchange rates. The volume of transactions is not deemed sufficient to enter into forward contracts. The Group has not sensitised the figures for fluctuations in foreign exchange rates as the Directors are of the opinion that these fluctuations would not have a significant impact on the financial statements of the Group at the present time. The Directors will continue to assess the effect of movements in exchange rates on the Groups financial operations and initiate suitable risk management measures where necessary.

(b) Price risk

The Group is exposed to equity securities price risk because of investments held by the Group as available-for-sale financial assets. The Group's investments in equity of other entities that are publicly traded are listed on AIM. There is a limited volume of shares traded in the Company's investee and if the Company was to dispose of a significant percentage of its shares this could have a substantial impact on the realisable value of these shares.

The Group does not have a substantial portfolio of shares and manages its price risk by undertaking specific company research prior to investing. The Group's listed equity investment is held for long term growth which the Directors believe mitigates the risk of crystallising short term speculative reductions in value.

The table below summarises the impact of increases/decreases in the AIM index on the Group's other comprehensive income for the year. The analysis is based on the assumption that the AIM index had increased/decreased by 10% with all other variables held constant and all the Group's listed equity investments moved according to the historical correlation with the index.

Other comprehensive income would increase/decrease as a result of gains/losses on listed equity securities classified as available-for-sale. Post tax losses would increase/decrease as a result of the utilisation of tax losses arising from the movement in fair value of listed equity securities classified as available-for-sale.

(c) Interest rate risk

As the Group has no borrowings, it is not exposed to interest rate risk on financial liabilities. The Group's interest rate risk arises from its cash held on short-term deposit, which is not significant.

Credit Risk

Credit risk arises from cash and cash equivalents as well as outstanding receivables. Management does not expect any losses from non-performance of these receivables.

The amount of exposure to any individual counter party is subject to a limit, which is assessed by the Board.

The Group considers the credit ratings of banks in which it holds funds in order to reduce exposure to credit risk.

Liquidity Risk

In keeping with similar sized mineral exploration groups, the Group's continued future operations depend on the ability to raise sufficient working capital through the issue of equity share capital. The Directors are confident that adequate funding will be forthcoming with which to finance operations. Controls over expenditure are carefully managed.

3.2 Capital Risk Management

The Group's objectives when managing capital are to safeguard the Group's ability to continue as a going concern, in order to enable the Group to continue its exploration and evaluation activities. The Group has no debt at 31 December 2012 and defines capital based on the total equity of the Company. The Group monitors its level of cash resources available against future planned exploration and evaluation activities and may issue new shares in order to raise further funds from time to time.

3.3 Fair value estimation

The table below analyses financial instruments carried at fair value, by valuation method. The different levels have been defined as follows:

·; Quoted prices (unadjusted) in active markets for identical assets or liabilities (Level 1).

·; Inputs for the asset or liability that are not based on observable market data (that is, unobservable inputs) (Level 3).

The following table presents the Group's assets that are measured at fair value. The Group does not have any liabilities measured at fair value.

The fair value of financial instruments traded in an active market is based on quoted market prices at the balance sheet date. A market is regarded as active if quoted prices are readily and regularly available from an exchange, dealer, broker, industry group, pricing service, or regulatory agency, and those prices represent actual and regularly occurring market transactions on an arm's length basis. The quoted market price used for financial assets held by the Group is the current bid price. These instruments are included in Level 1. Instruments included in Level 1 comprise AIM listed equity investments classified as available-for-for sale financial assets.

If one or more of the significant inputs is not based on observable market data, the instrument is included in Level 3.

The following table presents the changes in Level 1 instruments for the year ended 31 December:

The transfer into Level 1 is as a result of the events as described below in Note 4. At 31 December 2012 the Group's listed equity securities held as available-for-sale investments were relisted on AIM, following them being delisted from trade on AIM in the previous year.

The following table presents the changes in Level 3 instruments for the year ended 31 December:

4. Critical Accounting Estimates and Judgements

The preparation of the Financial Statements in conformity with IFRSs requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amount of expenses during the year. Actual results may vary from the estimates used to produce these Financial Statements.

Estimates and judgements are continually evaluated and are based on historical experience and other factors, including expectations of future events that are believed to be reasonable under the circumstances.

Significant items subject to such estimates and assumptions include, but are not limited to:

Impairment of exploration and evaluation costs

Exploration and evaluation costs have a carrying value at 31 December 2012 of £3,222,346 (2011: £3,000,921). Such assets have an indefinite useful life as the Group has a right to renew exploration licences and the asset is only amortised once extraction of the resource commences. Management tests annually whether exploration projects have future economic value in accordance with the accounting policy stated in note 2.7. Each exploration project is subject to an annual review by either a consultant or senior company geologist to determine if the exploration results returned during the year warrant further exploration expenditure and have the potential to result in an economic discovery. This review takes into consideration long term metal prices, anticipated resource volumes and supply and demand outlook. In the event that a project does not represent an economic exploration target and results indicate there is no additional upside a decision will be made to discontinue exploration. The Directors have reviewed the estimated value of each project prepared by management and have concluded that an adjustment of £137,111 is required and provided against the exploration assets.

Share based payment transactions

The Group has made awards of options and warrants over its unissued share capital to certain Directors and employees as part of their remuneration package. Certain warrants have also been issued to shareholders as part of their subscription for shares and suppliers for various services received.

The valuation of these options and warrants involves making a number of critical estimates relating to price volatility, future dividend yields, expected life of the options and forfeiture rates. These assumptions have been described in more detail in note 17.

Available-for-sale financial assets

Available-for-sale financial assets have a carrying value at 31 December 2012 of £50,000 (2011: £50,000). The Group holds listed equity securities as available-for-sale financial assets.

The fair value of financial instruments that are not traded in an active market (for example un-listed equity securities) is determined, where possible, by using valuation techniques. Management has concluded that in the case of unlisted securities held as available-for-sale financial assets, the range of reasonable fair value estimates is significant and estimates cannot be reasonably assessed. In such circumstances the Group is precluded from measuring the instruments at fair value and have thus valued these investments at cost less impairment. This is relevant for the year ended 31 December 2011, however in 2012 the company in which the investment is held re-listed on AIM and therefore has been valued at the bid price at the year end as there is an active market available.

The Group follows the guidance of IAS 39 to determine when an available-for-sale equity investment is impaired. This determination requires significant judgement. In making this judgement, the Group evaluates, among other factors, the duration and extent to which the fair value of an investment is less than its cost; and the financial health of the short-term business outlook for the investee, including factors such as industry and sector performance and operational and financing cash flow.

5. Segment Information

Management has determined the operating segments based on reports reviewed by the Board of Directors that are used to make strategic decisions. During the year the Group had interests in three geographical segments; the United Kingdom, Mauritania and Ethiopia. Activities in the UK are mainly administrative in nature whilst the activities in Ethiopia and Mauritania relate to exploration and evaluation work.

The Group had no turnover during the year.

A reconciliation of adjusted loss from operations per reportable segment to profit/(loss) before tax is provided as follows:

6. Operating Loss

During the year the Group (including its overseas subsidiaries) obtained the following services from the Company's auditors and its associates:

7. Property, Plant and Equipment

Depreciation expense of £6,963 (2011: £1,925) has been charged in administration expenses.

8. Intangible Assets

Exploration and evaluation assets are all internally generated.

Exploration projects in Ethiopia and Mauritania are at an early stage of development and no JORC or non-JORC compliant resource estimates are available to enable value in use calculations to be prepared. The Directors therefore undertook an assessment of the following areas and circumstances that could indicate the existence of impairment:

·; The Group's right to explore in an area has expired, or will expire in the near future without renewal;

·; No further exploration or evaluation is planned or budgeted for;

·; A decision has been taken by the Board to discontinue exploration and evaluation in an area due to the absence of a commercial level of reserves; and

·; Sufficient data exists to indicate that the book value will not be fully recovered from future development and production.

An impairment review of exploration and evaluation assets is carried on out an annual basis in order to ensure that it is valued at the lower of cost and recoverable amount. Following their assessment the Directors concluded that an impairment charge of £137,111 was necessary at the year end.

9. Investments in Subsidiary Undertakings

Investments in Group undertakings are stated at cost, which is the fair value of the consideration paid, less any impairment provision.

Details of Subsidiary Undertakings

Details of Subsidiary Undertakings

10. Restricted Assets

11. Available-for-Sale Financial Assets

All available-for-sale financial assets are UK listed equity securities denominated in UK Pound.

12. Trade and Other Receivables

Trade and other receivables are all due within one year. The fair value of all receivables is the same as their carrying values stated above.

With the exception of a £10,503 security deposit held within the Group and denominated in Ethiopian Birr, all trade and other receivables are denominated in Pound Sterling. The maximum exposure to credit risk at the reporting date is the carrying value of each class of receivable mentioned above. The Group does not hold any collateral as security.

At 31 December 2012 all trade and other receivables were fully performing.

13. Cash and Cash Equivalents

All of the Company's cash at bank is held with institutions with an AA credit rating.

14. Trade and Other Payables

Trade payables include amounts due of £25,085 (2011: £10,610) in relation to exploration and evaluation activities.

15. Deferred tax

An analysis of deferred tax assets and liabilities is set out below.

The gross movement on the deferred tax account is as follows:

The movement in the deferred tax liability during the year is as follows:

Deferred tax assets are recognised for tax losses carried forward to the extent that the realisation of the related tax benefit through future taxable profits is probable. A deferred tax asset of £nil (2011: £nil) has been recognised in respect of capital losses that would be available to offset against the taxable gain arising on the revaluation of available-for-sale financial assets.

The Group has additional capital losses of approximately £440,000 (2011: £440,000) and other losses of approximately £2,446,636 (2011: £2,475,589) available to carry forward against future taxable profits. No deferred tax asset has been recognised in respect of these tax losses because of uncertainty over the timing of future taxable profits against which the losses may be offset.

16. Share Capital

Authorised

Issued - Group and Company

(1) Includes issue costs of £40,427

(2) Includes issue costs of £87,695

(3) Includes issue costs of £20,690

On 6 March 2012 the Company issued 17,751,480 and 11,337,017 ordinary shares of 0.7 pence each fully paid at 1.69 and 1.81 pence per share respectively, as consideration for business acquisitions during the previous period. On the same date the Company issued 1,775,148 and 1,133,701 ordinary shares of 0.7 pence each fully paid at 1.69 and 1.81 pence per share respectively, in settlement of certain introducer fees in relation to the acquisitions.

On 21 May 2012 the Company raised £1,472,500 through the issue of 95,000,000 ordinary shares of 0.7 pence each fully paid at 1.55 pence.

On 7 June 2012 the Company raised £363,500 through the issue of 23,451,613 ordinary shares of 0.7 pence each fully paid at 1.55 pence.

On 16 July 2012 the Company issued 11,725,715 ordinary shares of 0.7 pence each fully paid at 1.75 pence per share as consideration for business acquisitions during the previous year. On the same date the Company issued 1,172,571 ordinary shares of 0.7 pence each fully paid at 1.75 pence per share in settlement of certain introducer fees in relation to the acquisition.

17. Share Based Payments

Share options and warrants outstanding and exercisable at the end of the year have the following expiry dates and exercise prices:

The Company and Group have no legal or constructive obligation to settle or repurchase the options in cash.

The fair value of the share options and warrants was determined using the Black Scholes valuation model. The parameters used are detailed below:

The expected volatility is based on historical volatility for the 6 months prior to the date of granting.

The risk free rate of return is based on zero yield government bonds for a term consistent with the option life.

A reconciliation of options and warrants granted over the year to 31 December 2012 is shown below:

No options or warrants were exercised during the period. The total fair value has resulted in a charge to the Income Statement for the year ended 31 December 2012 of £nil (2011: £23,266) and a charge to Share Premium of £12,669 (2011: £nil).

18. Employees

The Company had no full time employees during the year. The Directors and Company Secretary provided professional services as required on a part-time basis. Details of Directors' fees are disclosed in Note 19.

19. Directors' Remuneration

 No pension benefits are provided for any Director.

20. Finance Income

21. Taxation

No charge to taxation arises due to the losses incurred. No deferred tax asset has been recognised on accumulated tax losses, as the recoverability of any assets is not likely in the foreseeable future.

The tax on the Group's profit before tax differs from the theoretical amount that would arise using the weighted average tax rate applicable to the profits of the consolidated entities as follows: